HRES 2203 Winter 2019: Compensation and Benefit Analysis Assignment

This assignment delves into the core principles of compensation and benefits, exploring the key purpose of a compensation system in attracting and retaining qualified employees. It examines three crucial job attitudes—work acceptance, teamwork, and transparency of organizational goals—and their impact on employee behavior, drawing on content and process theories to explain how these attitudes shape task performance, membership, and organizational citizenship. The assignment also addresses legislated constraints on compensation strategies, including tax, employment standards, and trade union legislation, as well as mandatory employee benefits. It then details six categories of indirect pay, including health insurance, disability income, and pension plans, and contrasts flexible and fixed benefit plans. Finally, it outlines the steps for implementing a compensation strategy and analyzes the FIT Shop case study, examining the company's managerial strategies and goals related to compensation and employee motivation.

Running head: COMPENSATION AND BENEFIT
Compensation and Benefit
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1Compensation and Benefit
Key Purpose of a Compensation System:
Compensation is an essential part of the complex organisations that are competing in
the dynamic and democratic societies. The elementary purpose of the Compensation system
is to involve qualified employees in the organisation structure and exert from them the
organisational needs (Noe et al., 2017). This means that the employees must be understood
that employment refers to satisfaction of one’s own needs that are economic, security and
social along with the successful attainment of the organisational goals.
Key job attitudes and their role in employee behaviour.
The job attitude refers to the opinions, values, beliefs and orientations one has
towards one’s job. Therefore, these attitudes contribute towards the employee behaviour at
their workplace. There are three important job attitudes that shape the employee behaviour at
a workplace.
Firstly, the level of work acceptance among the employees regulate the behaviour of
the employees at the workplace. Work acceptance refers to accepting variety of work that
will positively contribute growth and production. It is seen that the employees with lower
level of acceptance of work, has a negative behaviour at work. They are always negative and
has poor level of work output. On the other hand workers with higher level of work
acceptance illicit good work production.
The second component is teamwork. In the modern age of workspace, team work is
an important aspect of work and it is present across all organisation. Working in team illicit
the level of accepting other people and their opinions and views. It also contributes positively
to the growth of the employees and allow each of the team members to excel in their field as
well as learning other elements of work. Therefore, employees who work in teams have

2Compensation and Benefit
improved their work and employees who cannot work in teams perceive a restriction in teams
of growth among the workplace.
Another important component is transparency of organisational goals. The
organisation must maintain transparency in organisational objectives. Therefore, employees
can perceive whether or not the organisational goals align with their personal goals. It is very
important. If the organisational goals do not fall into the same alignment then the workers
feel compulsion towards work that affect their productivity (Osibanjo et al., 2014).
Legislated constraints towards compensation strategy and mandatory employee
benefits.
There are certain constraints towards the compensation strategy. First and foremost,
the Tax Legislation. The pay system, which is an important aspect of the compensation
strategy, is influenced by the Tax Legislation. There are certain taxes that encourage
employee pays and discourage the employee pays. Therefore, those, which encourage the pay
structure contribute positively towards employee behaviour as they get benefitted, and those
contribute negatively, negatively impact upon the employee behaviour and motivation.
Second one is the Employment Standards Legislation that structure and refers to the
minimum payable wage to the employees. Every organisation has to abide by this structure.
Also the workers must be paid for the extra hours of work (Popov & Rocholl, 2015).
Therefore, this also influence the compensation strategy. Third is the Trade Union Legislation
is to additionally to allow the employees resistance from certain criminal and common risk
and empower them to embrace and release their typical and authentic capacities to protect
association reserves, and to encourage the working of associations. Lastly, the labour market
constraints, that refers to the constraints on the compensation strategy related to the relative
levels of demand and supply for specific occupational groups (Popov & Rocholl, 2015).

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The mandatory employee benefits that are exercised within the country Canada, are,
Compensations, Civic duties, Disability insurances, Worker’s compensations, Family and
Medical Leaves and Unemployment insurances (Long & Perumal, 2014).
Six categories of Indirect Pay and explanation of Pension Plans, Health Benefits, Pay for
not working, Employee Services and Miscellaneous benefits.
Indirect pay are the non-monetary benefits that are enjoyed by the employees. the six
main and common types are-
Health insurances, this refers to the medical benefits provided by the organisations for all
layers of employees.
Disability Income, that is, disabled people who were working or are still working get certain
extra amenities along with their wages.
Relocation benefits, that is, relocated employees are provided with housing and commutation
amenities by the organisations.
Overtime Policies, referring to the payment structure practised by the organisations for the
workers who work for extra hours.
Flexible working hours, which is practised as the motivation policy by the organisations.
Leave Policy, which is the most important structure of indirect pay and a must practice for
the organisations. This includes the casual, sick and for women, the maternity leaves.
Pension plan essentially refers to the retirement plans that is structured by the
organisations to help the employees in their sustenance after their employment.
Health benefits refer to the mediclaim policies and reimbursements of money by the
organisations after conducting surgeries or pathological tests.

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Pay for non-working hours refers to the sick leaves, casual leaves and maternity
leaves as structured and practised by the organisations. Each organisation has to follow this
and there is a standardised policy for all the organisations.
Employee services refer to the non-financial amenities provided by the organisations,
like cafeterias, free transportation, dry cleanings and the like.
Miscellaneous benefits refer to the other benefits provided by the companies such as
vacation trips, life insurance policies, car insurance policies and the like (Shaw, 2014).
Flexible and Fixed Benefit Plans.
Flexible Benefit plans refer to the benefits that are customisable and the fixed ones are
referred to those that are to be exercised by the organisations as provided by the standardised
structures. Flexible benefits invites increased productivity and retention of the employees
whereas, it also includes increased competition among the employees and there is also a
sense of biasness seen among the supervisors. The latter act as the cons. The fixed benefits
are to be exercised by all therefore there is no sense of biasness and all the employees enjoy it
all the same (Pantano, 2013). However, sometimes it denies the extra effort provided by the
employees which acts as a con for this kind of benefits.
Steps for Implementation of Compensation Strategy.
The steps that are to be followed in order to implement a fair Compensation strategy
includes the followings.
First, strategizing the plan objectives considering the organisational goals and the
organisational services.
Second, the employees must be cleared about the requirements they need to meet and further
the ways to achieve more than that and gain a position in the organisation.

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Third, the employers must determine the method and ways of compensation and reward
programs (Popescu, Bitoleanu, & Suru, 2013).
Fourth, the administration of the organisation must be bold and adapt in the implementation
process and must be adaptive towards changes.
Fifth, the supervisors must exercise a pilot study of the compensation strategy and view the
success of it and further restructure and re-adjust if any needed.
Lastly, the organisation must be consistent with the plan and practice it on a regular basis
(Bamberger, Biron & Meshoulam, 2014).
FIT Shop Case Study.
The FIT Shop is a new that is there in the industry for a very short period of time. The
founder of the firm is Susan Superfit whose objective is to sell all kind of elements related to
the fitness industry. This includes, training, conditioning, fitness and exercise equipment to
the consumers of all levels and all sectors of the society. The shop is trying to include
customisable customer services and provide equipment to the customers with personalization.
They are including and prioritising the customer needs and keeping it as their sole objective.
The owner of the company, Susan Superfit, was suffering from physical ailment and during
her time of recovery she came up with this innovative idea (Lejano & Shankar, 2013). She
understood the variation of needs related to the fitness regime as presented among the society
and therefore trying to incorporate and address those needs. She also understood that there is
a lack of sound knowledge among the majority of the population regarding the understanding
of fitness programs (Kim, Holland & Hun, 2013). Also she recognised the lacking of
orientation towards fitness. Therefore, she is also trying to incorporate these sections of
people.

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She further has identified three variables to structure and strategies her plan. Each
variable account and represent each type of managerial strategies and each of these strategy
are lying up on different kinds of rewards and recognitions. Therefore, these three managerial
strategies are-
Classical, that accepts that majority of the population are lazy and lethargic and do not like to
involve into any work but they can be convinced to get included into employment due to their
economic needs.
Human relations, which include the people who do not like to work but are likely to get
involved because of their social needs.
High involvement, refers to those who are extremely motivated to work and believe that
working is a motivational factor and is aligned with the proper organisational structures (Yin,
2017).
Each of these strategies have a different implication and are structured by different
rewards and recognition policies. The company have successfully identified the managerial
strategies and have taken proper approaches to address them. Further, they have considered
the following eight goals to get success in her work. These include, promoting the
organisational goals, applying proper strategies and structures, practice employee retention,
practice attractive offers to invite employees, comply with the legal structures, considering
and addressing to the financial structures of the company and achieve all these in a cost
effective manner.

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References:
Bamberger, P. A., Biron, M., & Meshoulam, I. (2014). Human resource strategy:
Formulation, implementation, and impact. Routledge.
Kim, S. H., Holland, S., & Han, H. S. (2013). A structural model for examining how
destination image, perceived value, and service quality affect destination loyalty: A
case study of Orlando. International Journal of Tourism Research, 15(4), 313-328.
Lejano, R. P., & Shankar, S. (2013). The contextualist turn and schematics of institutional fit:
Theory and a case study from Southern India. Policy Sciences, 46(1), 83-102.
Long, C. S., & Perumal, P. (2014). EXAMINING THE IMPACT OF HUMAN RESOURCE
MANAGEMENT PRACTICES ON EMPLOYEES'TURNOVER
INTENTION. International Journal of Business & Society, 15(1).
Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright, P. M. (2017). Human resource
management: Gaining a competitive advantage. New York, NY: McGraw-Hill
Education.
Osibanjo, A. O., Adeniji, A. A., Falola, H. O., & Heirsmac, P. T. (2014). Compensation
packages: a strategic tool for employees' performance and retention. Leonardo
Journal of Sciences, (25), 65-84.
Pantano, E. (2013). Ubiquitous retailing innovative scenario: from the fixed point of sale to
the flexible ubiquitous store. Journal of technology management & innovation, 8(2),
84-92.

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Popescu, M., Bitoleanu, A., & Suru, V. (2013). A DSP-based implementation of the pq
theory in active power filtering under nonideal voltage conditions. IEEE Transactions
on Industrial Informatics, 9(2), 880-889.
Popov, A. A., & Rocholl, J. (2015). Financing constraints, employment, and labor
compensation: evidence from the subprime mortgage crisis.
Shaw, J. D. (2014). Pay dispersion. Annu. Rev. Organ. Psychol. Organ. Behav., 1(1), 521-
544.
Yin, R. K. (2017). Case study research and applications: Design and methods. Sage
publications.